Gold settled lower on Thursday, as profit-taking pulled it further from 3-1/2 month highs, amid a retreat in stock markets after weak French and Chinese data.
The metal has fallen nearly $20 an ounce in the last two days as higher prices curbed physical demand and after minutes of the Federal Reserve's latest policy meeting reassured markets that it would keep cutting monetary stimulus.
It remains underpinned near current levels, however, as buyers of physical gold in Asia stepped in to buy on dips, and as the soft economic data undermined equities.
Spot gold was up 0.6 percent at $1,320 an ounce, while U.S. gold futures for April settled $3.50 lower at $1,316.90 an ounce. Earlier, it hit its highest since Oct. 31 this week at $1,332.10, before traders cashed in gains.
The dollar held firm, meanwhile, keeping a lid on gold, after minutes of the U.S. Federal Reserve's latest policy meeting showed the central bank would keep trimming its asset-purchase program. The Fed's stimulus program was a major factor driving gold to record highs in the wake of the financial crisis, as it kept up pressure on interest rates while stoking fears over inflation.
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